Firm Dynamics in Transition

49 Pages Posted: 10 Mar 2007

See all articles by Saao Polanec

Saao Polanec

University of Ljubljana - Faculty of Economics


This paper analyzes the firm dynamics during the process of transition. We show how firm size distribution has transformed over the course of transition and relate this evolution to theoretical contributions of different models. We find that the model of firm dynamics by Cooley and Quadrini (2003) is consistent with many empirical regularities observed during transformation. In particular, dynamics is affected by financing constraints and the speed of adjustment of productivity of large firms.

Keywords: manufacturing, size, labor productivity, total factor productivity, catching up, distributions, transition

JEL Classification: L11, L16, L60

Suggested Citation

Polanec, Saso, Firm Dynamics in Transition. EFA 2007 Ljubljana Meetings Paper. Available at SSRN: or

Saso Polanec (Contact Author)

University of Ljubljana - Faculty of Economics ( email )

Kardeljeva ploscad 17
Ljubljana, 1000

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